Free Negligent Referral Protection for Real Estate Agents

InterNACHI is so sure of its inspectors that it will indemnify any licensed real estate agent in an amount up to $10,000 if a third party successfully sues the agent for negligent referral of an InterNACHI inspector. This protection is offered at no cost to agents who register.

This is how the program works:

The agent must be a licensed real estate agent or broker in the relevant jurisdiction at the time of the referral.

The referral must be made to an inspector who is a member in good standing of InterNACHI at the time of the referral.

The program is only available for residential inspections; it does not apply to inspections of commercial properties.

The InterNACHI member must have a written inspection agreement with the customer at the time of the inspection.

The agent is not required to refer potential customers only to InterNACHI inspectors. The agent may provide the names of more than one inspector, but the program will still apply if the potential customer selects an InterNACHI inspector as a result of the referral and the agent otherwise qualifies.

The agent must admit to having made the referral.

The agent must register for the program prior to making the referral. Agents may register here. After registering, the agent will be sent a registration-verification code which shows that he or she has registered.

By registering for the program, the agent (on behalf of himself, his heirs, successors and assigns, and on behalf of the company that employs the agent) represents and agrees as follows:

a. Agent is authorized by agent’s employer to register for the program.

b. The exclusive venue for any litigation arising against InterNACHI or its officers as a result of the agent’s participation in the program shall be in the County or District Court of Boulder County, Colorado. Agent and agent’s employer must submit to the exercise of personal jurisdiction over them by those courts. In any such action, the parties waive trial by jury. If InterNACHI prevails in any such action, the agent shall pay InterNACHI’s attorney’s fees, expert witness fees, and costs. Colorado law will govern any such action.

c. There are no other promises or representations of InterNACHI that are not set forth here.

d. The terms of this program cannot be modified except in a written document signed by an authorized officer of InterNACHI.

The agent must promptly notify InterNACHI in writing when he or she first becomes aware that a person is claiming that the agent was negligent in referring the person to an InterNACHI inspector. The notice must include the name of the claimant and a summary of the relevant facts. The agent must send the notice by certified mail to InterNACHI, 1750 30th Street, Suite 301, Boulder, CO 80301.

The agent must provide InterNACHI with a certified copy of the judgment entered against the agent, which must be the result of a lawsuit against the agent for negligent referral to an InterNACHI inspector.

Upon receiving a certified copy of the judgment and satisfactory proof that the judgment resulted from an action against the agent for negligent referral to an InterNACHI inspector, InterNACHI will pay the agent the amount of the judgment up to $10,000, but only to the extent that the agent does not have insurance coverage to pay the judgment. The agent must provide all relevant insurance and other information to InterNACHI sufficient for InterNACHI to determine that the agent qualifies for payment.

The limit is $10,000 per incident. If the plaintiff sues and prevails against more than one agent and/or a company that employs or has a relationship with an agent, InterNACHI will pay only once. If a court enters judgment against more than one agent or against an agent and the agent’s employer, InterNACHI will pay a prorated share of the $10,000 to each such person or entity.